Auction vs. Private Treaty
What's the Difference and Which is Right for You?
If you’re buying property in New South Wales, you’ll quickly discover that not all homes are sold the same way. While some properties are sold by private treaty, others are sold at auction. Each method comes with its own process, legal obligations, and risks. And understanding the differences could save you time, money, and stress.
What is a Private Treaty Sale?
A private treaty is a common property sale method in NSW where the seller sets an asking price, and buyers make offers directly to the agent. The terms of the sale can be negotiated, and once an offer is accepted, contracts are signed and exchanged.
Pros of Private Treaty Sales:
You may have more time to consider your offer and negotiate conditions like finance approval or a building and pest inspection.
A 5-business-day cooling-off period generally applies, giving you the chance to withdraw after exchange (with a small fee).
The process is more private and less pressured than an auction.
Things to Keep in Mind:
Other buyers can make higher offers until contracts are exchanged.
The seller is not obligated to accept your offer, even if it’s at the asking price.
Delays in negotiation can lead to missed opportunities.
What is an Auction?
An auction is a public sale event (either onsite or online) where interested buyers bid against each other. The property is sold to the highest bidder once the reserve price is met. The sale is unconditional — once the hammer falls, it’s legally binding.
Pros of Buying at Auction:
The process is fast and transparent — you can see what others are bidding.
If you’re the highest bidder above reserve, the seller can’t back out.
You may be able to buy a property below market value if competition is low.
Key Differences at Auction:
There is no cooling-off period. Once you win, you must complete the purchase.
You need to pay a deposit (usually 10%) on the day.
You must complete all your due diligence — including contract review, inspections, and finance approval — before the auction.
Which Method is Right for You?
If you prefer time to think things through and want the flexibility to include conditions (like loan approval), a private treaty might suit you better. On the other hand, if you’re confident and prepared to act fast, an auction can be an efficient way to secure a property, especially in competitive markets.
Regardless of the method, it’s essential to have your legal team involved early. At Allwright Bourke, we review contracts before you sign or bid, explain your rights and obligations, and ensure all necessary checks are done. We’ll help you avoid surprises, project your interests, and make the buying process as smooth as possible.
FINAL THOUGHTS
Buying property can feel complex, but with the right support and advice, it doesn’t have to be. We will be with you from start to finish — protecting your interests, answering your questions, and making sure everything goes smoothly. If you’re ready to buy, let’s make it happen together.
Need expert advice before you make an offer or raise your hand at auction? Reach out to us at admin@allwrightbourke.com.au today and get the legal backing you need to buy with confidence.